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In our recent coverage of the National Association of Broadcasters' show (NAB), we mentioned Windows Azure Media Services as one of several emerging cloud models for scaling up streaming delivery to television-level viewership. The benefit of cloud-based delivery holds potential, yet one part of Azure Media Services was under-reported: live streaming.

Why does live streaming in Azure Media Services demand more attention? We think the inclusion of at least one live encoder option is a precursor to a larger trend that will occur within the live encoding space: a move towards one-off rentals of live encoding and away from buying dedicated live encoding resources.

Azure Media Services, according to Microsoft, "includes cloud-based versions of many existing technologies from the Microsoft Media Platform" and one of these is the Azure Media Encoder. The Media Platform equivalent is Expression Encoder, a perpetual license, stand-alone product.

Azure might seem, at first glance, to be following the Adobe Creative Cloud preview model, where several Adobe tools still in preview mode (such as Edge and Muse) are available for no charge until they reach version 1.0 maturity. Azure will initially offer free trials of its live encoding and batch transcoding, with final pricing determined when Windows Azure Media Services launch later this year.

"The upcoming preview of Windows Azure Media Services will be available at no cost," the Windows Azure website notes, although "charges for associated Windows Azure features like Storage, Egress, and CDN may apply."

Adobe holds an advantage when it comes to one aspect of inexpensive live encoding tools, since it appears the company will continue to offer the Flash Live Media Encoder (FMLE) as a free loss-leader for those who need to do live encoding. The licensing agreement for FMLE, however, requires those using the encoding solution to encode directly to Flash Media Server, eliminating the option to use lower-priced media servers for delivery.

In addition, with Creative Cloud, not every aspect of encoding and transcoding will be available for free. Adobe Media Encoder, a transcoding tool to generate multiple versions of files for on-demand viewing, is only available via an Adobe Creative Suite 6 (CS6) Master Collection or Production Premium perpetual license or a monhtly Creative Cloud subscription.

At $49.99 per month, the Creative Cloud subscription may prove to be a higher barrier to entry for those with basic transcoding needs, so we'll be paying close attention to see if Adobe creates a delivery cloud solution that also has a lower-priced subscription model that centers on AME and a live encoding delivery platform utilizing FMLE at the encoding origin location.

"Choose the Windows Azure Media Encoder or a built-in third-party encoder," the Azure website states, "working with a range of standard codecs and formats, including industry-leading Smooth Streaming, HTTP Live Streaming, MPEG-DASH and Flash."

One example of third-party integration is Digital Rapids' Kayak media operations and workflow solution, which was showcased as a Windows Azure Media Services third-party technology integration.

"Kayak platform powers the advances 'under the hood' of the upcoming version 2.0 of the Digital Rapids Transcode Manager software," said Digital Rapids' Mike Nann, referring to the transcoding solution sold by the company but also on track to be integrated into Windows Azure Media Services.

While Kayak is a transcoding workflow solution, it's not difficult to imagine a day in the near term that other companies—even those that currently use dedicated hardware like DSPs and GPUs—could consider renting their live encoding software as part of a cloud-based service. And for those dedicated encoders that currently use a general purpose processor, such as a CPU, the days for renting the encoder software to be used in a high-performance computing environment might just become a reality.

"We currently support High Performance Computing (HPC) functionality in Windows Azure Media Services that tools like our Transform Manger utilize," said Brian Goldfarb, director of product marketing for Windows Azure. "We will explore the option of GPU acceleration for live encoding within Azure moving forward."

In other words, get ready to balance the option of renting versus buying your next live encoder.